IFC HELPS PARK COMMERCIALIZATION IN SOUTH AFRICA

JOHANNESBURG, SOUTH AFRICA, December 6, 2000
— South African National Parks (SANP) has signed seven contracts for
concessions to establish eco-tourism lodges in its national parks. The
International Finance Corporation acted as lead adviser in establishing
the public-private partnerships which will put SANP in a strong enough
financial position to focus on protecting biodiversity.
SANP’s concessioning program aims to strike a balance between environmental,
social, and commercial factors. Only operators with proven eco-tourism
experience and financial strength were pre-qualified to bid on specified
concession sites, most of which are in the world-famous Kruger National
Park. SANP set stringent environmental protection standards, including
bonds to cover potential environmental and other damages over the life
of the contract. Weighting was primarily on the stream of concession
fee income that bidders would guarantee to SANP, but 20 percent of the
evaluation was for innovation in furthering black economic empowerment,
particularly in communities near the parks.
The successful bids will bring in revenue well above the minimum established
by SANP, proving the high value of wilderness assets in the national parks.
The net present value of the 20-year stream of guaranteed income
to SANP amounts to Rand 202 million (US$27 million). Actual income
is likely to be substantially above this guaranteed level. The seven
concessions will result in 316 new beds in the game lodge sector and capital
investment of Rand 127 million ($17 million).
Mr. David Donaldson, acting manager of the joint IFC/World Bank Private
Sector Advisory Services group, noted that three of the seven winners were
black-controlled consortia and he said that the new concessions would bring
important benefits to communities near the parks. Mr. Mavuso Msimang,
CEO of SANP, added that the design of the bidding process as well as its
management and execution won considerable praise from the industry, with
participants expressing satisfaction with the professional conduct of the
bid process.
The mission of IFC, part of the World Bank Group, is to promote private
sector investment in developing countries, which will reduce poverty and
improve people's lives. It fosters economic growth by financing private
sector investments, mobilizing capital in the international financial markets,
and providing technical assistance and advice to governments and businesses.